Prescription Drug Rebates

Negotiating rebates on prescription drugs is one way PBMs work to bring down health care costs down.

Drug manufacturers compete against each other for formulary coverage by negotiating rebates with PBMs. Rebates are the key to PBMs’ success in achieving access to affordable medications for patients.


PBM negotiations drive down costs for Medicare beneficiaries and plan sponsors.

The U.S. Government Accountability Office (GAO) and the U.S. Department of Health and Human Services, Office of Inspector General (OIG) both released reports confirming that PBM-negotiated rebates lower prescription drug costs in Medicare Part D.

99.6% of prescription drug rebates negotiated by PBMs with drug manufacturers in Medicare Part D are passed through to drug plan sponsors.

PBM-negotiated rebates kept Part D spending 7% lower than it would have been without rebates.

Rebate-adjusted spending on brand drugs with rebates increased just 4% instead of the 19% price increases that would have occurred without rebates.